Therapeutically targeting inflammation induced by innate immunity has the potential to reduce disease associated pathology; however, the first step in translating potential to clinical reality is defining the molecular pathways critical for regulating innate immunity, and identifying targets within these pathways that can be modulated. Significant progress has been made in delineating the molecular pathways regulating one member of the nucleic acids-sensing family of Toll-like receptors (TLRs), which have been implicated in development of autoimmune disease. Recent studies suggest that one of these TLRs, TLR9, is a pro-receptor that is activated by proteases in acidic endosomes. This cleavage removes an N-terminal fragment, leaving a C-terminal fragment, called p80, which is proposed to be the functional form of TLR9. This pathway has been touted as a new and potentially important drug target to reduce autoimmune inflammation. However, our preliminary results demonstrate that proteolytic cleavage of TLR9 does not occur in B cells, which respond robustly to TLR9 ligands. Moreover, we show that the p80 form of TLR9 is insufficient to support signaling in highly relevant macrophages, and dendritic cells. We review data that shows the N-terminal fragment, which is removed during the proteolytic event, has DNA binding activity. Therefore, we propose the hypothesis that the N-terminal fragment plays a critical role in determining the ligand specificity and response of the receptor. We will test this hypothesis in two aims, which define the role of the N-terminus in regulating specificity of the receptor, and the role of the cleavage event in regulating signaling and trafficking in various cell types including B cells, macrophages and dendritic cells. While we use TLR9 as a model system, recent published studies showed that other nucleic acid sensing TLRs are regulated by similar mechanisms. This study will provide critical new information that will help clarify controversies i the field. But more importantly, will determine whether proteolysis is, in fact, a promising new pathway for drug development, or of lesser significance compared with other regulatory mechanisms.